Annuity, Annuity Insurer and Annuity Producer Expertise

My experience in annuities and insurance is introduced in the video below, followed by further details of my annuities expertise.

William D. Hager
Specific Annuity Expertise
To be Read Together with my CVI.

SUMMARY OF MOST PERTINENT EXPERTISE

A. Expertise as to Annuity Insurance Policies.

Expertise as an Insurance Regulator. I have extensive and substantive experience relating directly to annuity insurance policies, including interpreting policy language and determining the insurer’s obligations under such policies. As a regulator for eight years in three positions ((i) Assistant Attorney General assigned to the Department of Insurance (Iowa), (ii) First Deputy Commissioner of Insurance (Iowa), and (iii) Commissioner of Insurance (Iowa)), I approved (or disapproved) of language in form annuity insurance policies used by each of the 500 life/annuity insurance companies (noting that not all life companies write annuities, and similarly, not all annuity companies write life insurance) doing business in the State of Iowa. I also approved (or disapproved) of language in form policy applications. In addition, I regularly served as an Administrative Law Judge (then known as a “Hearing Officer”) in matters relating directly to annuity insurance policies.

Expertise as a Member of NAIC. While Commissioner of Insurance for the State of Iowa, I served as a member of the National Association of Insurance Commissioners (“NAIC”), including as a member of its Executive Committee. NAIC is the nationwide organization of all state insurance commissioners. That organization has responsibilities for establishing model statutes and model administrative regulations for consideration by all states. While with the NAIC, I served as, among other things:

Member of the Executive (EX) Committee.

While a regulator, I served for a number of years as a member of the NAIC Executive Committee. That Committee had organizational oversight of all of the workings of the NAIC including oversight of its entire committee structure.

The mission of the Executive (EX) Committee is to manage the affairs of the NAIC in a manner consistent with the Articles of Incorporation and Bylaws. Its role is to provide ongoing Support of NAIC Programs, Products or Services as follows:

Based on input of the membership, identify goals and priorities of the organization and make recommendations to achieve such goals and priorities. Make recommendations to the Commissioners’ Conference.

Create/terminate task force(s) and/or executive working groups to address special issues and monitor the work of these groups. Create necessary task forces and/or executive working groups as necessary.

Submit reports and recommendations to NAIC members concerning the activities of its subcommittee and the standing committees. Submit report at each national meeting.

Consider requests from NAIC members for friend-of-the-court briefs.

Establish and allocate functions and responsibilities to be performed by each zone.

Pursuant to the Bylaws, oversee the NAIC offices to assist the organization and the individual members in achieving the goals of the organization.

Conduct strategic planning on an ongoing basis.

Plan, implement and coordinate communications and activities with the Federal Insurance Office (FIO).

Plan, implement and coordinate communications and activities with other state, federal, local, and international government organizations to advance the goals of the NAIC and promote understanding of state insurance regulation.

Review and approve requests for development of model laws. Coordinate review of existing model laws.

The Life and Annuity Committee: Chairman.

The Executive Committee had oversight of all of the NAIC committees including the Life Insurance and Annuity Committee. In addition to Executive Committee oversight, as indicated, I served as chairman of the Life Insurance and Annuities (A) Committee. In that regard, the following task forces and working groups currently report to the Life Insurance and Annuities (A) Committee:

Annuity Disclosure Working Group

Contingent Deferred Annuity Working Group

ERISA Retirement Income Working Group

Life Actuarial Task Force

The current mission of the Life Insurance and Annuities (A) Committee is to consider issues relating to life insurance and annuities and review new life insurance products and provide ongoing Maintenance of NAIC Programs, Products or Services as follows:

Monitor the activities of the Life Actuarial (A) Task Force.

Oversee development of the principle-based reserving system.

Review and revise, as necessary the Life Insurance Buyer’s Guide in conjunction with Appendix A of the Life Insurance Disclosure Model Regulation (#580).

Oversee changes and provide technical assistance as appropriate for the production of the Market Share Reports for the Top 125 Life and Fraternal Insurance Groups and Companies by State.

Appoint the Annuity Disclosure (A) Working Group to review and revise, as necessary, the Buyer’s Guides to Fixed Deferred Annuities, which was Appendix A of the Annuity Disclosure Model Regulation (#245).

Appoint a Viatical Settlements (A) Working Group to review and consider revisions to the Viatical Settlements Model Regulation (#698) for consistency with the 2007 revisions made to the Viatical Settlements Model Act (#697), including reviewing and considering revisions to or replacement of, as appropriate, Appendix A - Informational Brochure.

Review the U.S. Securities and Exchange Commission (SEC) Life Settlements Task Force Staff Report and the U.S. Government Accountability Office (GAO) Report to the U.S. Senate Special Committee on Aging on Life Insurance Settlements and assess their effect on the functional state regulation of life settlements, if any, and make recommendations, as necessary, to the NAIC.

Appoint the Contingent Deferred Annuity (A) Working Group to review the issues identified in the Life Actuarial (A) Task Force referral concerning contingent annuities and report the results of its review to the Committee.

Appoint an ERISA Retirement Income Working Group to work with representatives of the U.S. Department of Labor (DOL), the White House Council of Economic Advisors (CEA), the U.S. Department of the Treasury and any other appropriate federal agencies, in coordination with the NAIC Government Relations Leadership Council (GRLC), to consider possible options for easing plan sponsor concerns with the financial soundness of annuity providers as related to the DOL annuity safe harbor plan sponsor selection of annuity provider and fiduciary responsibility requirements.

Expertise as General Counsel and Chief Lobbyist of the American Academy of Actuaries. I served as General Counsel and Chief Lobbyist of the American Academy of Actuaries, in Washington, D.C. The Academy is the national professional association for actuaries. These professionals calculate premium pricing for policies. Because policy language dictates premium pricing, actuaries are involved in determining policy language.

Expertise as Chief Executive Officer of a Major Insurance Entity. After serving as a regulator, I served as President and Chief Executive Officer of the National Council on Compensation Insurance (“NCCI”), in New York City. NCCI, which does business in about 40 states, is a nationwide industry-owned organization with about 1,500 employees and annual revenues of about $150 million. NCCI was domiciled in Florida and did business throughout the U.S. NCCI, therefore, was subject to the full authority of various State Departments of Insurance (DOIs) and to the laws and jurisdictions of those states. Among my responsibilities at NCCI (along with my staff) was to draft the workers compensation insurance policy forms used in NCCI’s 40 states of operation. The annuity insurance benefit is a key feature of workers compensation. I drafted form policy language (tailored to each specific state’s insurance code) as well as form endorsements and other form policy documents. In addition, I worked to obtain the approval of all such policy forms, endorsements, and documents from each state’s department of insurance for use by insurance companies. I am very familiar with the meaning and relevance of state-approved form policies, endorsements, applications, and other related documents.

Expertise as a Reinsurance Arbitrator. I am one of about 200 certified reinsurance arbitrators (by ARIAS-US), and, in that capacity, I have presided over disputes between insurers and their reinsurers over language in annuity insurance policies.

B. Expertise as to the Duties of Annuity Insurance Companies Regarding Claims Handling

Expertise as Commissioner of Insurance. I also have had significant experience and responsibility in connection with passing judgment on insurers’ responsibilities as to insurance agents, applicants, insureds, owners, and beneficiaries. In particular, in my positions as Assistant Attorney General, First Deputy Commissioner of Insurance, and Commissioner of Insurance in the State of Iowa, I had daily responsibility for holding all of the state’s 500 life/annuity insurers accountable to their legal and regulatory obligations. I did so through a series of action steps and tools. The action steps and tools included the following:

a. NAIC Market Regulation Handbook. As Commissioner of Insurance, I had as an available tool the NAIC Market Regulation Handbook (“Examiners Handbook”). The Examiners Handbook, among other things, sets forth standards by which to assess annuity insurers’ (i) policy applications, (ii) policy issuance, and (iii) responsibilities to their agents. The Handbook also sets forth standards by which to assess agent contracts and appointments of agents. The Examiners Handbook is used by every department of insurance in the United States. The standards have been universally promulgated and adopted by all 50 Commissioners of Insurance. The standards of the Examiners Handbook are universally recognized as appropriate standards against which to judge annuity insurer behavior.

b. Market Conduct Examinations. On a regular basis, my Department utilized the Examiners Handbook to conduct Market Conduct Examinations on annuity insurers to determine whether they were meeting their obligations to insureds and others. The examinations entailed the physical inspection of insurers’ policy applications and policy issuance files to identify any errant action or inappropriate behavior. As further discussed below, errant insurers were warned, disciplined, and prosecuted as required.

c. NAIC Financial Examiners Handbook. As Commissioner of Insurance, I had another tool available to me—namely, the NAIC’s Financial Examiners Handbook (“Financial Examiners Handbook”). The Financial Examiners Handbook sets forth standards by which to assess annuity insurer solvency on a triennial basis. As with the Examiners Handbook, the Financial Examiners Handbook is used by every department of insurance in the United States. Similarly, these standards have been universally promulgated and adopted by all 50 Commissioners of Insurance. The standards of the Financial Examiners Handbook are universally recognized as appropriate standards against which to judge annuity insurer behavior.

d. Financial Examinations. On a regular basis, my Department utilized the Financial Examiners Handbook on annuity insurers to determine whether they were likely to remain solvent. Financial examinations entailed the physical inspection of insurers’ operations and files to ensure, among other things, proper financial reporting as to agent and policyholder matters. As further discussed below, errant insurers were warned, disciplined, and prosecuted as required.

f. Prosecution. When insurer behavior required formal action (whether as a result of complaints from the public or Department investigations), my Department prosecuted such insurers under Iowa’s civil Administrative Procedures Act. During my eight years as a regulator, I served in various capacities with respect to such prosecutions, including (i) as a line prosecutor (as Assistant Attorney General), (ii) as a prosecutor making charging decisions (as First Deputy and Commissioner of Insurance), and (iii) as an Administrative Law Judge (“ALJ”) presiding over prosecutions. I have served as an ALJ in scores of cases where an annuity insurer’s (i) agent, (ii) policy form, (iii) policy application, and (iv) overall conduct were at issue.

Expertise as Chief Executive Officer of a Major Insurance Entity. While I was President and CEO of NCCI, it was subject to the full range of authority of throughout the U.S.’s Departments of Insurance as discussed above. During that time, I visited and physically toured and reviewed in excess of 400 insurance companies. Through that experience, I gained direct exposure to standard practices in the insurance industry.

Expertise as General Counsel and Chief Lobbyist of the American Academy of Actuaries. As stated above, I served as General Counsel and Chief Lobbyist of the American Academy of Actuaries, in Washington, D.C. Collectively, Academy members were affiliated with virtually every annuity insurance company in the United States. The Academy’s Board of Directors likewise was comprised of leading insurance company executives from such annuity insurance companies.

Expertise as an Attorney in Private Practice. As an attorney in private practice, I became familiar with standards of practice in the annuity insurance industry by representing insurer interests as counsel to (i) the Professional Insurance Agents of Iowa and (ii) the Iowa Association of Life Underwriters (life, health, and annuity insurance agents). Through those representations, I became intimately familiar with insurance forms and practices such as those at issue here.

C. Expertise as to Annuity Insurance Underwriting

Expertise as Commissioner of Insurance. Consistent with the discussion above, I also have had significant experience and responsibility in connection with passing judgment on insurers’ underwriting duties and responsibilities. In particular, in my positions as Assistant Attorney General, First Deputy Commissioner of Insurance, and Commissioner of Insurance in the State of Iowa, I had daily responsibility for holding all of the state’s 500 life/annuity insurers accountable to their underwriting obligations. I did so through a series of action steps and tools. The action steps and tools included the following:

a. NAIC Market Regulation Handbook. As Commissioner of Insurance, I had as an available tool the NAIC’s Examiners Handbook. The Examiners Handbook, among other things, sets forth standards by which to assess annuity insurers’ underwriting behavior (i) during the policy application process, (ii) during the time of policy issuance, (iii) as to insurers’ agents, and (iv) subsequent to policy issuance. The standards set forth in the Examiners Handbook are used by every state department of insurance and have been universally promulgated and adopted by all 50 Commissioners of Insurance. They are universally recognized as appropriate standards against which to judge annuity insurer behavior.

b. Market Conduct Examinations. On a regular basis, my Department utilized the Examiners Handbook to conduct Market Conduct Examinations on annuity insurers to determine whether they were meeting their obligations to insureds and others as to underwriting issues. The examinations entailed the physical inspection of insurers’ policy applications and policy issuance files to identify any errant action or inappropriate behavior. As further discussed below, errant insurers were warned, disciplined, and prosecuted as required.

c. NAIC Financial Examiners Handbook. As Commissioner of Insurance, I had another tool available to me—namely, the NAIC’s Financial Examiners Handbook. The Financial Examiners Handbook sets forth standards by which to assess annuity insurer solvency on a triennial basis. As with the Examiners Handbook, the Financial Examiners Handbook is used by every department of insurance in the United States. Similarly, these standards have been universally promulgated and adopted by all 50 Commissioners of Insurance. The standards of the Financial Examiners Handbook are universally recognized as appropriate standards against which to judge annuity insurer behavior.

d. Financial Examinations. On a regular basis, my Department utilized the Financial Examiners Handbook on annuity insurers to determine whether they were likely to remain solvent. Financial examinations entailed the physical inspection of insurers’ operations and files to ensure, among other things, (i) compliance with underwriting duties and (ii) proper financial reporting. As further discussed below, errant insurers were warned, disciplined, and prosecuted as required.

f. Prosecution. When insurer behavior required formal action (whether as a result of complaints from the public or Department investigations), my Department prosecuted such insurers under Iowa’s civil Administrative Procedures Act consistent with the discussion in the prior section.

Expertise as Chief Executive Officer of a Major Insurance Entity. My executive experience at NCCI also resulted in expertise as to insurer responsibilities as to annuity insurers’ underwriting behavior (i) during the policy application process, (ii) during the time of policy issuance, (iii) as to insurers’ agents, and (iv) subsequent to policy issuance.

The Gold Standard of Underwriting. While I was President and CEO of NCCI, it was responsible for formulating the underwriting standards used for most all workers compensation policies in the nation. Underwriting for workers compensation is routinely recognized as the most intense underwriting of all lines of insurance. This is because there are over 600 officially-designated workers compensation classification codes under which an employee may be classified based upon his or her principal job duties. NCCI authored and maintained a detailed, word-by-word, phrase-by-phrase description of each of these 600 classification codes, to which insurers were required to adhere. That document is contained within a text known as the Scopes Manual, which is recognized industry-wide as the Gold Standard for underwriting workers compensation insurance.Furthermore, the underwriting process, regardless of the specific line of insurance at issue is fundamentally the same. This is because almost all insurers (including annuity insurers), regardless of the specific line of insurance at issue, seek to select the most favorable risks and reject the least favorable risks.

Expertise as General Counsel and Chief Lobbyist of the American Academy of Actuaries. As stated above, I served as General Counsel and Chief Lobbyist of the American Academy of Actuaries, in Washington, D.C. Collectively, Academy members were affiliated with virtually every annuity insurance company in the United States. The Academy’s Board of Directors likewise was comprised of leading insurance company executives from such annuity insurance companies.

Expertise as an Attorney in Private Practice. As an attorney in private practice, I became familiar with underwriting standards and practices in the annuity insurance industry by representing insurer interests as counsel to (i) the Professional Insurance Agents of Iowa and (ii) the Iowa Association of Life Underwriters (whose duties included the first line of annuity underwriting).

D. Expertise as to Annuity Insurance Agents

Expertise as a Regulator: Licensure. I have extensive and substantive experience relating to the duty of care that comes to bear on insurance agents and agencies in their relationships with annuity insurance companies. As an Assistant Attorney General (see above), I prosecuted annuity insurance agents for violating their duties of care. As an insurance regulator (see above), I, along with my staff, screened hundreds of thousands of agents for character and background. As to subject matter testing, I formulated agent-licensing exams. Upon passage of the exams, I have licensed hundreds of thousands of insurance agents. In addition, I had direct responsibility over the appointment processes of some 500 life/annuity insurance companies and all of their annuity agents. I also supervised the ongoing relationships between all annuity insurance companies in Iowa and their appointed agents.

Expertise as a Regulator: Prosecution and Continuing Education. I have initiated license revocation actions against annuity insurance agents and prosecuted them to completion. I also have had full responsibility for the continuing education of licensed annuity insurance agents. Among other things, I approved continuing education courses for acceptable content, oversaw the administration of such courses, and granted or denied credit for such courses.

Expertise as a Regulator: ALJ. As an Administrative Law Judge, I presided over and entered findings of fact and conclusions of law in scores of cases in which annuity insurance agents were prosecuted for violating standards of care.

Expertise as an Attorney in Private Practice. As an attorney in private practice, I defended annuity insurance agents and brokers (in administrative law forums) against alleged violations of their duties of care.

Expertise as Chief Executive Officer of a Major Insurance Entity. As President and CEO of NCCI, I developed substantial working relationships with the insurance agent and agency communities.

E. Expertise as to Actuarial Issues

Expertise as Commissioner of Insurance. As Commissioner of Insurance, my Department was responsible for overseeing insurer solvency (including insurer finances and accounting) and conducting insurer examinations. As part of that responsibility, my Department oversaw the practices of insurers, agents, and actuaries in formulating premium rates. In addition, I oversaw Iowa’s regulation of the securities industry, and Iowa’s Superintendent of Securities reported directly to me. As a member of the NAIC, I served as both Vice Chairman and Chairman of NAIC’s Life Insurance Committee. The charge of this Committee was to oversee life insurers and all issues relating to life insurance products, including underwriting practices. This Committee’s work included considerations relating to underlying actuarial issues as to pricing.

Expertise as Chief Executive Officer of a Major Insurance Entity. As President and CEO of NCCI, I had responsibility to accurately price some $12 - $15 billion of workers compensation insurance in 39 states. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its member insurance companies and then using that data to project necessary premium changes. NCCI carried out its intensive pricing work though the professional efforts of an actuarial division of about 150 personnel.

Expertise as General Counsel and Chief Lobbyist of the American Academy of Actuaries. I served as General Counsel and Chief Lobbyist of the American Academy of Actuaries. In that capacity, I advised on admissions, discipline, federal antitrust law, and general corporate law. I represented the 10,000-member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance, and Labor, and House Committees on Education, Labor, Energy, and Ways and Means) and before various federal regulatory agencies. The Academy is the professional organization of actuaries and includes qualified actuaries from all disciplines and all forms of insurers. Collectively, Academy members were affiliated with virtually every annuity insurance company in the United States. The Academy’s Board of Directors likewise was comprised of leading insurance company executives from such annuity insurance companies.

Expertise as an Author on Actuarial Issues. I have served in a number of cases as an expert on actuarial issues, including in Arizona, Florida, and California. I also am the author of a number of articles on the actuarial profession.

Expertise as a Reinsurance Arbitrator. I am certified by ARIAS-US as one of about 200 U.S. certified reinsurance arbitrators. I sit as an arbitrator of disputes between insurers and their reinsurers. Actuarial issues routinely arise in such cases in the form of pricing disputes. Oftentimes, there are disputes regarding the information supplied by the ceding company and that information’s positive or negative effect on the pricing that was agreed upon at the time of the initial reinsurance agreement.

II. ADDITIONAL EXPERTISE TO RENDER OPINIONS

Among my positions and experiences, the following should be read together with my associated Curriculum Vitae:

A. Formal Education.

1. Bachelors Degree in Mathematics. I hold a bachelors degree in secondary mathematics education from the University of Northern Iowa;

2. Masters Degree in Education (Psychology). I hold a masters degree in educational psychology from the University of Hawaii; and

3. Juris Doctor Degree. I hold a Juris Doctorate degree from the University of Illinois.

B. Legal Background.

4. Lawyer. I am a member of the Florida Bar, and have been an insurance lawyer since 1975. I am also licensed to practice law in the states of Iowa and Illinois, and before the U.S. Supreme Court. (Note: My Illinois law license is currently in an inactive status at my request and is eligible for reactivation at any time upon my request.)

C. Licensure and Certification.

5. Certified Reinsurance Arbitrator. I am certified by AIDA Reinsurance and Insurance Arbitration Society-United States (sometimes “ARIAS-US”) as one of approximately 200 U.S. certified reinsurance arbitrators, and sit as an arbitrator on disputes between annuity insurers and their reinsurers.

D. Insurance Expert.

6. Expert Witness. I have served as an expert witness throughout the U.S., and have been qualified as a witness in 20 or so states as an expert in open court.

7. Consultant to the U.S. Attorney. By way of example of my various assignments, I have been retained in the past by the U.S. Attorney, Middle District of Florida, as an insurance consultant in a complex civil insurance matter.

8. Insurance Consultant: U.S. Department of Justice. Similarly, I have also been retained by the U.S. Department of Justice as an insurance consultant in a complex insurance case.

9. Expert Witness: United States Air Force. I have been retained as an expert witness to the United States Air Force in a complex environmental pollution matter.

Expert Witness: Various State Departments of Insurance. I have also been retained by the Liquidation Division of the Florida Department of Financial Services as an expert witness and have recently testified on its behalf in both Federal Court in Tampa and in Leon County Circuit Court as its expert in complex insurance liquidation matters. I have similarly been retained as an insurance expert by the state of Arizona in a major liquidation case. Likewise, I have been accepted as and testified as an insurance expert before the Arizona, Oklahoma, South Dakota, Nevada and Texas Departments of Insurance.

E. Reinsurance Arbitrator.

10. Reinsurance Arbitrator, November 2003 to Present. As indicated above, my background includes extensive exposure to the various reinsurance mechanisms and relationships. Further details are set forth below relating to this experience. In addition, I am a certified ARIAS-US reinsurance arbitrator (see immediately below). The relevance of this experience is that reinsurers have substantial influence on the behavior of their underlying annuity insurers from whom business is ceded.

As of November 2003, I was certified by ARIAS-US as an arbitrator for reinsurance and insurance matters. Today, there are approximately 200 individuals so certified by ARIAS-US in the United States.

ARIAS-US certifies knowledgeable and reputable professionals for service as panel members in reinsurance and insurance arbitration matters. The organization’s criteria for certification are as follows:

10 years of significant specialization in the insurance/reinsurance industry;

11. Chief Executive Officer of a Major Insurance Industry Regulated Organization—President and CEO of the National Council on Compensation Insurance (sometimes “NCCI”), 1990–1998. NCCI is one of the larger and more pervasive U.S. insurance organizations. During my tenure as CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12-$15 billion of workers compensation insurance in 40 states throughout the U.S. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its 600 member insurance companies, and then used that data to project necessary premium changes. NCCI accomplished this mission through some 1,000 employees, approximately 600 of which were professionals, and had annual revenues of $150 million.

Regulated throughout the U.S. While I was President and CEO of NCCI, the company did business in approximately 40 states. As such, the company was governed by the various State Insurance Codes (and continues to be so governed today), including all applicable provisions relating to the various state’s insurance law (as it was governed as well by the balance of the states in which it did business). In addition, NCCI was subject to pervasive regulatory oversight by the various state DOIs. Finally, NCCI was subject to the applicable jurisdiction of all state and federal courts. As a result, I am generally familiar with applicable state insurance laws, regulations, and related civil proceedings.

Annuity Insurance Program. As CEO, I had daily exposure and responsibilities to the U.S. workers’ compensation program as administered by the various states. This program constitutes one of the largest annuity insurance programs in the world, with some 100 million worker lives insured (of course, other important coverages are provided through workers compensation, most notably, wage replacement and medical coverage).

Insurance Company Practices. In addition, NCCI had a vested interest in member insurers’ reputation for fairness because it impacted regulatory attitudes toward NCCI’s premium approval process.

Agent and Broker Practices. Most all workers’ compensation products are sold through agents and brokers and as such, as CEO of NCCI, my responsibilities included creating and sustaining liaison with all of the operative U.S. agent associations and communities. I have had extensive exposure to agent and insurer practices and procedures.

Industry Standards of Practice. While President and CEO of NCCI, I visited, physically toured, and reviewed more than 400 insurance companies. I also gained direct exposure to the procedures, processes, and standard industry practices of the U.S. insurance community and its agents. As stated, most all workers’ compensation products are sold through agents, and accordingly as CEO of NCCI, my responsibilities included creating and sustaining liaisons with all of the operative U.S. agent associations and communities. Furthermore, I have had extensive exposure to agent and insurer practices and procedures. In addition, regarding workers’ compensation, many of these companies were also licensed to sell annuity insurance.

12. General Counsel and Director of Government Relations to the American Academy of Actuaries (Washington, D.C.), 1980-1983. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries (sometimes “the Academy”). My responsibilities in this position included advising on admissions, discipline, federal antitrust law, and general corporate law. I represented this 10,000 member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance and Labor, and House Committees on Education, Labor, Energy, and Ways and Means) and the various federal regulatory agencies. Annuity Insurance Companies: Agents and Brokers. The Academy is the professional organization of actuaries, and includes qualified actuaries from all disciplines and all forms of insurers. The Academy’s members had affiliations with virtually every annuity insurance company in the U.S. The Academy’s Board of Directors likewise was comprised of leading insurance company executives from such companies whose duties included that of sales oversight.

13. Risk Metrics Corporation: Marketing to Agents and Brokers. I co-founded this Florida-based information company in 1998. Risk Metrics (including Datalister, Inc.) gathers and sells public data relating to workers’ compensation insurance to a wide range of insurance-oriented customers, including insurance agents and brokers. Within the last number of years, I have sold my interest in this corporation.

14. Attorney in Private Practice. As an attorney in private practice, I represented a number of agent and insurer interests, and became familiar with regulatory and industry standards of practice. Those interests included the position of Iowa Counsel to the Property Casualty Insurers Association of America (“PCIAA”).

Annuity Issues. Those interests also included intimate involvement with the agent community as counsel to the:

Professional Insurance Agents of Iowa; and

Iowa Association of Life Underwriters (i.e., life and annuity agents).

My specific duties as counsel to both the Professional Insurance Agents of Iowa and the Iowa Association of Life Underwriters included an in-depth familiarity with annuity insurance products and insurance agents and their issues.

G. Regulatory.

15. Commissioner of Insurance, Iowa, 1986-1990. As Insurance Commissioner appointed by Governor Terry Branstad in July 1986, I was responsible for the regulatory oversight of all insurance companies, agents, and brokers authorized to conduct business in the state of Iowa. My Department was responsible for solvency oversight, insurance company examinations, financial and accounting matters of insurance companies, consumer protection, agent and broker licensing, and oversight of the property and casualty and annuity insurance company practices. In particular, that oversight included the responsibility of overseeing practices of annuity insurance agents and brokers. In addition, I oversaw the state regulation of the securities industry, with Iowa’s Superintendent of Securities reporting directly to me.

Regulatory Oversight: Annuity Insurer Practices. As Insurance Commissioner, my responsibilities included oversight over the education, licensing, discipline, and general supervision of all annuity insurance companies and all annuity insurance agents in the state of Iowa. Consequently, I am very familiar with the responsibilities and applicable duty of care that come to bear upon annuity insurance companies and their agents.

Regulatory Oversight: Annuity Insurance Agent Practices: Prosecutions. As Insurance Commissioner, I also had day-to-day responsibility to assure that all relationships carried out by insurance companies doing business in the state met all of their duties, obligations and statutory and regulatory responsibilities as they conducted business with their agents. This included oversight of (i) screening for character and competency on a pre-licensure basis, (ii) licensing, (iii) revocation of licenses, (iv) continuing education and its administration and enforcement, (v) accounting and (vi) agent relationships with their insurers.

Examination of Annuity Insurance Companies. As Insurance Commissioner, I directed and oversaw the examination of all insurance companies authorized to do business in the state of Iowa. Those examinations included a focus on both financial matters (so-called triennial examinations of insurers—more than 100 such examinations were conducted while I was Commissioner) and examinations of specific complaints about insurers (so-called Market Conduct Examinations—more than 50 such exams were conducted while I was Commissioner).

Market Conduct Examinations of Annuity Insurer Practices Including Practices With Their Agents. Market Conduct Examinations focused on marketplace issues, including examining annuity insurance companies as to compliance with their agent and policyholder duties. Concurrent with such exams, I personally reviewed and approved the final examination reports before they were issued. In addition, in many of these instances, I visited the subject annuity insurer before the examination report was issued. These visits involved walking the floors of such insurance companies; in other words, reviewing their affected operations first-hand.

Prosecution of Annuity Insurance Companies for Violations of Standard of Care. As Insurance Commissioner, I employed a full-time team of lawyers who fielded consumer complaints relating to all areas of annuity insurers as well as premium finance companies. Indeed, many of these complaints as well as results of Market Conduct Examinations resulted in formal action under the state’s Administrative Procedures Act, with the annuity insurer’s license to conduct business in the state at risk for failing to adhere to their duties. At times, I served as the Hearing Officer on such matters.

Major Insurance State. Iowa has approximately 1,000 authorized property and casualty insurance companies, more than 500 life/annuity insurance companies, and an unusually large number of domestic insurance companies. As such, insurance regulation in that state is a serious job.

16. National Association of Insurance Commissioners, 1986-1990. Concurrent with my service as Iowa Insurance Commissioner, I served as a member of the NAIC. The NAIC is an organization of the Insurance Commissioners of all 50 states, and meets quarterly in locations throughout the U.S. to consider and evaluate national insurance issues. Further, the organization is professionally staffed with more than 100 personnel. The organization is based in Kansas City, Missouri. The NAIC considers all major insurance issues, and then promulgates model insurance laws and regulations, which are routinely (but optionally) adopted at the individual state level.

NAIC Chairmanships–Chairman of the Midwest Zone. I was elected by my fellow Insurance Commissioners from the Midwest Zone (composed of the Midwest states, which constitutes approximately one quarter of all of the states) to provide leadership and representation of the Midwest before the balance of the states. This position included a position on the Executive Committee of the NAIC, as well as major responsibilities relating to the assignment of states (and their related examiners) to specific examinations, both triennial and Market Conduct.

NAIC Leadership—Member of the Executive Committee. I also served as an elected member of the Executive Committee of the NAIC, the body that served as the steering committee of the organization, providing leadership between full membership meetings and recommendations to the full membership as to complex or politically-charged issues within the organization. In addition, this position included oversight responsibility over the following NAIC Committees: A, B, C, D and E.

NAIC Chairmanships–Chair of the Life Insurance Committee: Underwriting Issues. As a member of the NAIC, I served as both Vice-Chairman and Chairman of the NAIC Life Insurance Committee. The charge of this Committee was oversight over all issues relating to life insurance products as well as life insurers, including practices such as underwriting.

NAIC Chairmanships—Chair of the Universal Life Insurance Task Force. In addition to chairing the Life Insurance Committee, I also chaired the Universal Life Insurance Task Force.

NAIC Chairmanships—Chair of the Life Insurance Product Development Task Force. I also chaired the Life Insurance Product Development Task Force. While Chairman of this Task Force, I led the development of model disclosure statements for universal and indeterminate premium life products designed to assist consumers in their comparison of different types of life insurance products.

Other NAIC Chairmanships. I also served in a number of NAIC capacities, including Chairman of the Financial Services and Insurance Regulation Task Force.

Member—Commercial Lines Committee. In addition, I served as a member of the NAIC Commercial Lines Committee. This committee considered all issues relating to commercial lines policies.

My service on the following NAIC Committees was also helpful in this regard:

Member, the Blanks Committee;

Member, Guarantee Fund Committee;

Member, Rehabilitator and Liquidators Committee;

Member, Casualty Actuarial Committee;

Member, Commercial Lines Committee;

Member, Valuation of Securities Committee;

Member, International Insurance Relations Committee;

Member, Accounting Practices and Procedures Committee; and

Member, State and Federal Legislative Committee.

Ongoing Regulatory Involvement. In the years since leaving the regulatory ranks, I have continued to be closely involved with the NAIC and the regulatory community. As President and CEO of NCCI, I was in regular attendance at meetings of the NAIC. I continue to attend these meetings and to be actively engaged with the regulatory process. Included in attendance at NAIC meetings were my observations at the NAIC of the ongoing regulation of annuity insurers and their agents.

17. First Deputy Iowa Insurance Commissioner, 1976-1978. As First Deputy Insurance Commissioner, I had oversight responsibility for all facets of insurance regulation, including oversight of the property and casualty division, the annuity insurance division, agent licensing, consumer complaints, and premium finance companies. As First Deputy Commissioner, the functions of overseeing all aspects of annuity insurers belonged to me.

Furthermore, in this position, I had extensive exposure to and direct responsibility for all facets of annuity insurers’ activity, including oversight of insurers’ relationships.

Regulatory Oversight: Annuity Insurance Agent Practices. As First Deputy Insurance Commissioner, I also had day-to-day responsibility to assure that all relationships carried out by insurance companies doing business in the state met all of their duties, obligations and statutory and regulatory responsibilities as they conducted business with their agents. This included oversight of (i) character and competency screening on a pre-licensure basis, (ii) licensing, (iii) revocation of licenses, (iv) continuing education and its administration and enforcement, (v) accounting and (vi) agent relationships with their insurers. I am very familiar with the responsibilities and applicable duty of care that come to bear upon insurance companies in their relationships with their agents.

Regulatory Oversight—Annuity Insurer Practices. In addition to expertise as to policy forms and coverage issues, as First Deputy Insurance Commissioner, my responsibilities included oversight oof the education, licensing, discipline and general supervision of all annuity insurance companies and their agents in the state of Iowa. I am very familiar with the responsibilities and applicable duty of care that come to bear upon annuity insurance companies.

Financial Examination of Annuity Insurance Companies. As First Deputy Insurance Commissioner, I supervised (along with the Chief Examiner) the examination of all insurance companies authorized to do business in the state of Iowa. Those examinations included a focus on both financial matters (so-called triennial examinations of insurers–more than 100 such examinations were conducted while I was First Deputy Commissioner) and examinations of specific complaints about insurers (so-called Market Conduct Examinations–more than 50 such exams were conducted while I was First Deputy Commissioner).

Prosecution of Annuity Insurance Companies and Their Agents for Violations of Standard of Care. As First Deputy Insurance Commissioner, I employed a full-time team of lawyers who fielded consumer complaints relating to all areas of annuity insurers as well as premium finance companies. Indeed, many of these complaints, as well as results of Market Conduct Examinations, resulted in formal action under the state’s Administrative Procedures Act with the annuity insurer’s or agent’s license to conduct business in the state at risk for failing to adhere to their duties. At times, I served as the ALJ on such matters.

18. Iowa Assistant Attorney General Assigned to the Insurance Department, 1975-1976. As Assistant Attorney General, I had departmental prosecutorial responsibilities for violations of the Insurance Code under the state’s APA, including those violations committed by annuity insurance companies and their agents and brokers. The Attorney General responsibility also included issuing Attorney General Opinions as to the construction of insurance laws and regulations. In short, I served as the Insurance Department’s General Counsel.

19. Legal Counsel to Iowa House of Representatives. As legal counsel to the Iowa House of Representatives in the 1975 session, I provided counsel on all relevant caucus issues as well as the following support:

Researched pending legislation;

Prepared memorandums in support of proposed legislation;

Provided legal advice; and

Participated in bill drafting, including that relating to annuity insurance and annuity insurance agents.

20. Lecturer at the Iowa Bar Review School, 1985-1990. I was invited to provide the insurance content review material and lecture for the insurance section of the bar review course in Iowa. Included in this lecture was extensive law applicable to the interpretation and construction of laws and regulations affecting annuity insurance companies, including practices relating to their agents. I authored this material and provided this lecture to students studying to pass the Iowa bar for approximately five years, until accepting the position of CEO of NCCI in Florida.

21. Chief of Staff to the U.S. Congress. I served as a Chief of Staff to the U.S. Congress in Washington D.C. to an Iowa Congressman for approximately one year. Among other activities, I participated in legislative drafting of insurance and reinsurance legislation.

22. Elected Member of the Florida House of Representatives: Member and Vice Chairman of the House Insurance Committee. I am also currently serving as an elected member of the Florida House of Representatives for House District 89 (Boca Raton , Delray Beach, and Palm Beach). Among other things, I serve on the House Insurance Committee, where I am also Vice Chairman of that Committee, which has oversight of all insurance activities in the state of Florida, including that of oversight of annuity insurers, their agents and brokers and their relationships with their insureds and those related to their insureds.